F-35 jet combat ready next year, new Israeli order close

BY BALAZS KORANYI

(Reuters) – The first version of the F-35 fighter jet will be combat ready by mid-2015, despite an engine failure which still needs a fix, and Israel could sign a deal within months to buy more of the aircraft, program officials said on Thursday.

The cost of the jet, which has struggled with delays and budget overruns, could be reduced to the target level by 2019. South Korea’s decision on Wednesday to buy 40 F-35s for about $7 billion was a step in lowering the per unit cost, officials said in Oslo after a two-day meeting between F-35 partner countries.

“We are in discussion with another one of our partners, Israel, to increase their buy and those discussions are going very very well,” U.S. Air Force Lieutenant General Chris Bogdan, the Pentagon’s F-35 program manager said.

“We are very very close, (we’ll sign) probably within the next few months,” Bogdan said.

Israel has so far ordered 19 jets but Bogdan declined to predict the size of its future order.

ENGINE TROUBLE

The $400 billion F-35 program was set back earlier this year when the Pentagon grounded its fleet after a June 23 fire on an Air Force F-35A, an all-new aircraft with advanced stealth capabilities, improved maneuverability and high-tech sensors.

Engine maker Pratt & Whitney is investigating the issue and expects to determine the root cause this month, or early October. It expects aircraft already in service to be fixed in early 2015, Chris Flynn, the firm’s vice-president for the F-35 engine program said.

“We understand what fundamentally happened … and we have tremendous confidences in the timeline,” Flynn said. “We think it’s a fairly straightforward fix.”

Lockheed Martin (LMT.N), the jet’s developer, said the investigation and the fix will delay testing but there is leeway in the schedule and it expects the U.S. Marine Corps to declare the first version of the jet combat ready by mid-2015.

Though no longer grounded, the fleet of more than 100 F-35s already delivered flies under restrictions, pending the engine fix. Other issues include the integration of the communication systems and subtle changes to flight controls.

Lockheed, engine maker Pratt & Whitney, a unit of United Technologies Corp (UTX.N), and other suppliers are investing heavily to drive down the program’s projected $400 billion cost to make it more affordable for cash-strapped governments looking to buy more than 3,100 aircraft over the next decades.

Lockheed expects the per unit cost to drop to $80-$85 million by 2019 from about $115 million now, Jeff Babione, the firm’s deputy manager for the F-35 program said.

“The cost reduction will come with the increase in orders,” he said. “We anticipate that there’s a market out there for 4,000 airplanes … the biggest risk to cost is if we don’t get the orders we showed. That will significantly erode our ability to take advantage of economic order quantities and reduce cost.”

Officials downplayed a report released this week by the U.S. Government Accountability Office (GAO), which said it would cost the U.S. government $19.9 billion a year to operate and maintain its F-35 fleet in 2035, compared with about $11 billion in the 2010 fiscal year for the four types of warplane it will replace.

“I am less concerned about the cost estimates that occur 50 years from now, because those are fundamentally based on a whole lot of assumptions,” Bogdan said. “We change even a little bit of those assumptions, those cost estimates change greatly.”

“What’s more important for me is what are we doing today … to reduce the overall lifecycle costs of the airplane,” he said.